Caruso in the catbird seat

Wall Street is in Jolyne Caruso's blood. The daughter of a corporate-bond trader, she first set foot on a trading floor at the tender age of 17 while working as a Bear Stearns retail sales assistant. By 1999 she had become chairman and president of J.P. Morgan Secu-rities. So it's no surprise that after a four-year stint with hedge fund Andor Capital Management, Caruso, 45, is back on the sell side, as the new head of Lehman Brothers' global absolute-return strategies division.

Caruso's sojourn as president of Andor, a technology-oriented long-short fund she helped Dan Benton and Christopher James found in 2001, ended after Andor's $9.6 billion in assets under management plunged to $3.5 billion last summer following trading losses and redemptions. Caruso found herself with little to do and left the firm in December.

She won't be idle any longer. At Lehman she'll help build out the firm's existing hedge fund platform. Her approach: take strategic minor stakes in established, successful firms and help their managers develop new funds.

"Many hedge funds are now looking to investment banks to help them diversify and grow their businesses," she says. "I feel as though I'm sitting in the catbird seat on a tall ship -- I can look out at these opportunities and assess them and figure out whether they fit into our organization."

Her first task will be working with Dwight Anderson at Ospraie Management. (Lehman bought a 20 percent stake in Ospraie in April.) Ospraie has just added five teams of independent managers -- veterans plucked from such firms as Caxton Associates, Dreyfus and Moore Capital Management -- whose funds will be seeded in part with Lehman capital. Ospraie Wingspan, as the new multimanager fund product is called, will be available to Ospraie's current investors and through Lehman's global client network. Lehman is expected to negotiate more such strategic alliances in the months ahead.

"My husband thinks I'm crazy to be working 12 hours a day again for an investment bank, but I love it," says Caruso. "I've been on Wall Street since I was 17 years old, and I guess I never really left."